[One version of this book review was published
in the University of Michigan Law Review; since this is from my hard
disk it is probably not identical. I am grateful to that journal for
its permission to republish the article here]

Less Law Than Meets the
Eye

Robert C. Ellickson, Order Without Law,
Harvard University Press, Cambridge 1991.

This book starts with a famous academic
parable--Ronald Coase's parable of the farmer and the rancher,
intended to explicate the relation between liability rules and land
use. Coase asked how the behavior of a farmer and a neighboring
rancher would be affected by whether the rancher was responsible for
damage done by straying cattle. In one of the first statements of
what came to be called the Coase Theorem, he concluded that, as long
as the parties could readily bargain with each other over their
actions, the legal rule would affect the pattern of side
payments--who had to pay what to whom--but not the use of the
land.

Shasta county California is a patchwork of open
range and closed range, designed by the accidents of history to test
Coase's conclusion. In open range the legal rule is that the farmer
is responsible for fencing out straying cattle, while in closed range
the rule is that the rancher is responsible for fencing his cattle
in. Allowing for the fact that real legal rules are somewhat more
complicated than academic parables, the situation corresponds almost
exactly to Coase's hypothetical.

Robert Ellickson looked at what happened in Shasta
county, using techniques of investigation modeled on the approach of
Law and Society scholars. He used interviews, aerial photographs, and
searches of the relevant records to try to discover what actually
happened with regard to straying cattle, land use, fence building,
and a variety of related issues. He studied an area that included
both closed and open range over a period that included one successful
and one unsuccessful attempt to persuade the board of supervisors to
convert territory from open to closed. His conclusion was surprising
and interesting. Coase was correct in predicting that land use would
be unaffected by the legal rule. He was incorrect in predicting that
side payments would be affected.

So far as Ellickson could tell, the legal rule on
who was liable for straying cattle had no effect at all on the
behavior of ranchers and farmers, insofar as it involved cattle
straying onto the farmers' land. His observations and interpretations
appeared in a series of articles, of which the best known is probably
"Of Coase and Cattle: Dispute Resolution among Neighbors in Shasta
County."[1]
He has now combined and expanded the articles into a book that should
be of quite general interest, to legal academics and many others. His
argument draws on both the Law and Economics and the Law and Society
traditions, combining economic analysis, anthropology, sociology,
game theory, and a variety of other approaches to understanding human
society.[2]
One of his conclusions is that law is very much less important than
most of us believe.

What Ellickson discovered about Shasta County was
that interactions between neighbors, with regard to straying cattle
and many other things, were controlled not by law but by a system of
norms, a private law code having no connection to courts,
legislatures, or any other agency of state power. When a rancher was
informed that one of his animals was trespassing, he was expected to
apologize, retrieve the animal, and take reasonable precautions to
keep it from happening again. If significant damage had been done,
the rancher was expected to make up for the damage--in one case by
helping replant a damaged plot of tomatoes.

The system was self enforcing. If a rancher
consistently let his animals stray, or failed to offer to make up for
significant damages, the victim would respond by initiating true
negative gossip--spreading the word that that particular rancher was
not behaving in a proper neighborly way. If that failed to work,
straying animals could be transported far from the victim's (and
owner's) property--imposing significant costs on the owner who had to
retrieve them. In extreme cases trespassing animals might even be
deliberately injured. The one thing good neighbors did not do, even
under severe provocation, was go to court.

Straying cattle were not the only thing to which
legal rules were irrelevant. California has quite detailed laws
specifying under what circumstance one of two adjoining landowners
can build a fence and charge part of the cost to his neighbor.
Landowner's in Shasta county build fences, and their neighbors
sometimes end up paying for them. But what fences get built and who
pays for how much of the cost are unaffected by what ought to be the
relevant law.

Legal rules do seem to have some effect on how
willing ranchers are to let their cattle stray onto highways, where
they might be hit by passing motorists. Ranchers are much more
careful to avoid such accidents in closed range than in open
range--that, according to Ellickson, is the main reason that people
care enough about the legal categories to lobby the board of
Supervisors for and against proposals to close areas of previously
open range. The reason ranchers are more careful is that they believe
that in open range the driver is strictly liable for damages to
cattle (the motorist "buys the cow") while in closed range the
rancher is strictly liable ("buys the car").

The odd thing in the situation is that, by
Ellickson's account, the ranchers are wrong: Whether an accident
occurs in closed or open range has little or no effect on who is
liable for what after a collision. The one form of behavior affected
by the legal distinction between closed and open range is one to
which it is almost irrelevant.

Ellickson's account of how conflicts involving
traffic accidents with animals are settled raises a number of
different issues. The first, and simplest, is why the same people who
are almost never willing to go to court on one set of issues are
frequently willing to on another. The answer is fairly clear. Both
trespass and the construction and maintenance of fences involve
frequent minor conflicts between neighbors--people locked into a long
term relationship with each other. Highway accidents are rare,
sometimes large, conflicts between people who usually do not know
each other and have no reason to expect to be in contact in the
future. On almost any plausible theory of norms, it is easier to use
them to deal with the former than the latter sort of problem. And
indeed it appears, from Ellickson's account, that minor highway
accidents involving neighbors--the kind of accidents for which norms
are adequate--do get handled by norms rather than law.

The second and harder problem is to explain why
ranchers are ignorant of the relevant law--why they believe that they
"have the rights" in open range, when in fact highway accidents in
both open and closed range are covered by essentially the same rules
of negligence. The corresponding ignorance with regard to trespass
and fence law is easy enough to explain. Since these conflicts are
resolved by norms rather than by laws, knowledge of the law is of no
value to the people concerned, and there is no good reason for them
to pay the cost of acquiring it. They are exhibiting what economists'
call "rational ignorance."

But accident claims are resolved by law rather
than by norms. Furthermore, according to Ellickson's account, the
ranchers' false beliefs about the law actually influence their
behavior in at least two important ways. Farmers who have been
grazing their cattle during the summer in unfenced
areas[3]
(typically upland forests leased from timber companies, the U.S.
Forest Service, or the Bureau of Land Management) move elsewhere when
the range is closed, not because they are worried about being sued
for trespass but because they are afraid that one of their cattle
will wander onto a road and be involved in an accident, leaving them
liable for the damages. And ranchers, whether or not they let their
cattle roam free, campaign fiercely against proposals to close
additional areas of range.

Assuming that Ellickson has correctly described
the law, the ranchers' beliefs, and the ranchers' behavior, his
observations seem inconsistent with the economist's usual assumption
of rationality. Information about law is not free, but it is not all
that expensive. By Ellickson's account, the ranchers are aware that
the courts have in several cases found the owners of cattle liable
for accidents that happened in open range--striking evidence that the
ranchers' view of the law is wrong. Instead of changing their views,
they interpret the cases as experimental error--the judge got the law
wrong.[4]
That does not look like a rational approach to processing information
when something valuable is at stake.

Ellickson's explanation of the paradox is that
political clashes over proposals to close parts of the range are
symbolic rather than actual battles. The ranchers are really fighting
not over liability law but over status. By winning, they establish
the fact that Shasta County is still Marlboro Country--a place where
the ranchers are in the saddle, politically and socially as well as
literally. Since they are not willing to admit, even to themselves,
what they are fighting over, they instead maintain their false
beliefs about the law in order to provide a plausible excuse for
their own actions.

As an explanation of political behavior, this may
make a good deal of sense. If the only decision affected by ranchers'
beliefs about the law was whether to oppose petitions to close the
range, then the symbolic stakes involved, although they lie outside
the sort of values usually included in economic analysis, might
provide a rational justification for the ranchers' actions. Their
beliefs would then be a costless way of concealing, from themselves
and others, the nature of what they were doing.

But this is a much less convincing explanation in
the case of ranchers who change where they herd their cattle in
response to such false beliefs.[5]
If acting on more accurate beliefs about the law would make them
better off, it is hard to believe that there is no excuse they could
find for politically opposing closed range ordinances while
continuing to herd in closed range.[6]

The answer, I think, is that acting on more
accurate beliefs about the law would not make the ranchers better
off. Although their beliefs are incorrect, their actions are probably
correct.

The explanation for this paradox is that the cost
to a traditionalist rancher--one who lets his cattle run free during
the summer--of not leasing land in closed range areas is essentially
zero, since land is available to lease at the same price in open
range areas. Although the difference in expected liability costs
between open and closed range is not nearly as great as the ranchers
believe, it is quite likely, for reasons Ellickson discusses, that
there is some difference--that under some circumstances an animal's
owner might be found liable for an accident in closed range when he
would not in open range.[7]
If so, then it makes sense for traditionalist ranchers to avoid
closed range areas.

This explanation suggests two new puzzles. Why is
the price for leasing land the same in both areas, when the
consequence is that the owners of unfenced grazing land in closed
range have no tenants and no rents? Why do the owners not cut the
price they charge enough to compensate the ranchers for the small
increased cost of liability? And, given that this is happening, why
do we not find that the owners of such land, rather than the ranchers
who rent it, are the ones leading the opposition to petitions to
convert areas from open to closed range? It is the landowners, after
all, who are actually bearing the cost of the conversion.

The answer to both questions is very simple. Most
of the land used for unfenced grazing is owned by either the Bureau
of Land Management or the U.S. Forest Service. Neither organization
is willing to delegate to its local agents the authority to set
price--with the result that both of them charge a uniform price for
grazing leases across the entire western United States. The remaining
land is owned by large timber companies, whose policies are only
slightly more flexible.[8]
The amounts at stake in grazing leases on upland forests are not
large enough to make it worth the cost, to either the public or the
private owners, of overcoming the principal-agent problems that
prevent them from either fine tuning their leases or intervening in
local politics to prevent areas they own from being
closed.

If the explanation I have offered is correct, then
Ellickson's account of how ranchers behave is consistent with
conventional economic ideas of rationality. Rationality, after all,
is an assumption about what people do, not why they say they do it.
Ellickson's explanation of why ranchers persist with their false
beliefs does suggest interesting possibilities in the direction of
explaining why holding false beliefs may be rational--not because the
beliefs are true, but because they are useful.

Ellickson does not limit his discussion to Shasta
County. He also discusses, in somewhat less detail, norms that apply
to orchard men in the Pacific Northwest, whalers in the 19th century,
and modern American academics. The last example is the cruelest, at
least so far as his academic readers are concerned, since he offers
evidence that professors, in photocopying each other's articles,
ignore the relevant copyright laws while adhering to professional
norms well designed to serve the interests of our academic
community--in some cases at the expense of our publishers.

One of the charms of the first--descriptive--half
of the book is the way in which it uses simple observations of the
real world to throw cold water into the faces of legal theorists of
almost all sorts. It is hard to see how legal rules can serve the
roles assigned to them by doctrinal scholars, economists, feminists,
or practically anyone else, if nobody pays any attention to
them.

Part of what Ellickson accomplishes in this book
is an attack on legal contralism, the doctrine that assigns law a
central role in determining what people do and what society is like.
His purpose, however, is not destructive but constructive. It is to
explain the nature of the institutions that actually do a large part
of what law is supposed to do. His central thesis is a simple
one--that close-knit groups tend to develop efficient norms. He
concludes that while formal law is important and useful in human
affairs, it is less important and less useful than generally
believed. In a wide variety of situations, people not only succeed in
resolving their conflicts without recourse to law, they do it by
mechanisms that work considerably better than the legal
system.

One important issue Ellickson does not explore is
where such norms come from and why they tend to be efficient. If
rules are well designed, the obvious explanation is that someone
designed them. While there may be some systems of religious norms
that were actually the result of deliberate design, that does not
seem a very plausible explanation for the norms that apply to
straying cattle and fence building in Shasta country, or to who owned
a whale when two different ships had been involved in killing
it.

The obvious alternative to deliberate planning is
evolution. Perhaps, over time, societies with better norms conquer,
absorb, or are imitated by societies with worse norms, producing a
world of well designed societies. The problem with that explanation
is that such a process should take centuries, if not millenia--which
does not fit the facts as Ellickson reports them. Whaling norms, for
example, seem to have adjusted rapidly to changes in the species
being hunted.

Perhaps what is happening is evolution, but
evolution involving much smaller and more fluid groups than entire
societies. Consider a norm, such as honesty, that can profitably be
followed by small groups within a society, applicable only within the
group. Groups with efficient norms will prosper and grow by
recruitment. Others will imitate them. Groups with similar norms will
tend to fuse, in order to obtain the same benefits on a larger scale.
If one system of norms works better than its competitors, it will
eventually spread through the entire society. When circumstances
change and new problems arise the process can repeat itself on a
smaller scale, generating modified norms to deal with the new
problems.

This conjecture about how norms arise and change
suggests a prediction: Even if a norm is efficient, it will not arise
if its benefits depend on everyone following it. Consider the whaling
norms that Ellickson discusses. It is in the interest of any pair of
captains to agree in advance to an efficient rule for dealing with
whales that one ship harpoons and another one brings in, just as it
is in the interest of a pair of individuals to agree to be honest
with each other. But a rule for holding down the total number of
whales killed so as to preserve the population of whales is useful
only if everyone follows it. The former type of norm existed, the
latter did not--with the result that 19th century whalers did an
efficient job of hunting one species after another to near
extinction.[9]

This conjecture explains one feature of the norms
that Ellickson observes--their apparent failure to deal with certain
sorts of problems. There are at least two other superficially
puzzling features that Ellickson discusses. One is the tendency to
use inefficient punishments to enforce norms. A second is the
apparent preference for non-monetary over monetary
payments.

For an example of an inefficient punishment,
consider the case of straying cattle. Suppose that, for the tenth
time, a herd of your cattle breaks down my fence and destroys my
garden. I know, from the previous nine incidents, that calling you up
to complain will do no good--you will retrieve the cattle but do
nothing to reimburse me for my damages. Calling up a lawyer and suing
you would violate the strong norm against taking neighbors to court.
What do I do?

The obvious efficient solution, at least in a
rural context, is to convert one of the ten animals into packages of
meat in my deep freeze, then call you up to complain that nine of
your cattle have gotten into my garden. I thus punish you and
reimburse myself simultaneously. After a few repetitions you are
likely to get the point--and if not, at least I will eat
well.

This solution is obvious and efficient, but it is
not what happens. Instead of slaughtering one animal, I drive the
whole herd to some inconvenient location many miles from both my farm
and your ranch. Instead of imposing costs on you in a way that
benefits me, thus holding down the net cost of the punishment, I use
a punishment that is costly for both of us. Why?

Ellickson recognizes the problem and suggests,
although he does not fully explicate, the answer. In his words, "The
major disadvantage of a seizure, as opposed to a destruction, is that
someone who loses property to an intentional taker is more likely to
interpret the event as an act of initial aggression than as an
exercise in self-help."

The issue is not merely one of misinterpretation.
As Locke pointed out many years ago, every man is a biased judge in
his own case. If the victim, sitting as his own judge and jury, knows
that the higher the punishment he imposes the larger his own benefit,
he will have a strong incentive to find the defendant
guilty.[10]
If the punishment is costly for both parties, the victim will only be
willing to impose it when he really believes that the trespasser has
been behaving unreasonably and must be stopped. The victim, knowing
that, will be much more willing to accept the judgement and reform
his behavior. Thus a norm limiting the injured party to inefficient
punishments is actually an efficient rule. It raises the cost of
punishment, but it makes it much more likely that a punishment will
have its desired effect and less likely that it will set off an
escalating feud.[11]

The second puzzle is why the equivalent of damage
payments in a system of norms takes a non-monetary form--reimbursing
a farmer by helping him replant his garden instead of simply paying
for the damage done. Ellickson's explanation is that cash
transactions are "cold and impersonal, ... . A consitutive norm
favoring in-kind transfers ...puts members through the ritual of
signalling that they are in solidarity, rather than at arm's length."
But this is not really an answer--it leaves us with the question of
why money transactions are seen as cold, and whether this perception,
and this characteristic of Shasta County norms, apply more generally.
There are plenty of societies, after all, where money is explicitly
involved in marriage arrangements, even though an important element
of such arrangements is the creation of solidarity between the newly
related kindreds. In one of the most famous feuds in literature, the
killing match in Njal's Saga,12 Njal and Gunnar
maintain the peace by passing a purse of silver back and forth to
compensate each other for the killings alternately instigated by
their feuding wives.

Robert Ellickson does not, and cannot be expected
to, fully answer all of the question that he raises. Understanding
the nature of non-legal norms is a hard problem, and, if it is ever
fully solved, the process will almost certainly require a variety of
different sorts of expertise, probably including economics, game
theory, and anthropology as well as law. What he does do is to make
it overwhelming clear that norms are an interesting and important
issue, and to make a reasonable start at sketching out an approach to
understanding them.